How Can Telcos Reduce The High Cost Of Deploying #5G?

As the service providers start to deploy 5G networks across the globe, the next-generation of mobile networks will have to constitute ways to enable network densification. This will imply features like multi-gigabit mobile broadband, support for billions of Internet of Things (IoT) devices and sensors and Ultra Reliable Low Latency Communications in a much effective way. (See: 5G Trials Drive Network Densification.)

It is easy to see that the 5G network will involve significant investment in setting up the network and also in densification. Off late there is a growing interest in shared infrastructure to reduce the financial burden and the effort of setting up 5G network. This approach is also in keeping with the vision of a single, physical infrastructure to support many virtual networks.

According to published reports citing officials from the Ministry of Science and ICT, mobile operators from South Korea such as SK Telecom, KT and LG U+, along with broadband operator SK Broadband, are working together to avoid redundant investments, thereby trying to regulate the concept of infrastructure sharing in a better way. It is also said that through this, cost savings would be around $938 million over the next decade. Possibly it is time for other countries and operators to start adopting this model to bring down the high cost of setting up 5G network.

China has been also witnessed the usage of infrastructure sharing by the three significant mobile operators of the country namely, China Mobile, China Telecom and China Unicom, who have collaborated to establish China Tower Corp, with a capacity of more than 2 million base stations. Also, there are speculations of China Tower being in talks with electric utility State Grid Corp of China (SGCC) so as to share resources to cut capex and increase efficiency.

A Mckinsey report, The Road To 5G: The Inevitable Growth Of Infrastructure Cost says, “The cost and investments related to traditional 2G, 3G, and 4G networks, unlike those for 5G, will differ over time and depend on local conditions. Operators have at least two options. The first involves a lean-in strategy in which they prioritize 5G investments with the hope of accelerating commercial prospects. The second involves a more conservative approach in which they delay 5G investments as long as possible while existing networks are upgraded.”